Medical device costs seen leveling off

SAN JOSE, Calif. – Since 1992, the U.S. has consistently spent about six percent of its national health care dollar on medical devices, according to a new report. A med tech lobbying group issued the report as part of an effort to seek repeal of a device tax in recent health care reform legislation.

Prices for medical technology grew at less than half the rate of overall prices in the economy and only one-fifth the rate of prices for other medical goods and services, said the study from the Advanced Medical Technology Association (AdvaMed).

From 1989 to 2010, spending on medical technology as a percent of total health care spending rose from 5.3 percent in 1989 to 6 percent in 2010. Most of the 0.7 percent growth came between 1989 and 1992.

Since 1992, medical device spending has remained essentially constant at about 6 percent of national health care spending, the report said. In 2010, the last year studied, spending on medical devices and in-vitro diagnostics totaled $156.3 billion.

“Unlike other areas of health care, the prices of medical devices have been growing much more slowly,” said Ann-Marie Lynch, AdvaMed’s executive vice president for payment and health care delivery policy.

Over the past 21 years, device and diagnostic prices have increased at an average annual rate of one percent, compared to the overall Consumer Price Index increase of 2.7 percent, the Medical Care CPI increase of 4.7 percent and the Medical Care Services CPI increase of five percent.

“We are proud of the value we deliver as an industry to patients worldwide and look forward to sharing the results of this new study with Members of Congress and other policymakers as they consider changes to the health care delivery and payment system in the United States,” said Lynch.

Sweeping health care reform legislation passed last year included a provision for a new tax on medical devices to help extend coverage to more Americans.